In response to a Kaiser Health News investigation into the University of Virginia Health System’s aggressive collection practices, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) sent a letter Thursday demanding answers to questions about UVA’s billing practices, financial assistance policies and even its prices.
The Finance Committee oversees federal tax laws, and Grassley wrote that it is “my job to make sure that entities exempt from tax are fulfilling their tax-exempt purposes.”
The KHN investigation found that UVA Health System, a taxpayer-supported and state-funded entity, filed 36,000 lawsuits for more than $106 million in six years.
“Unfortunately, I have seen a variety of news reports lately discussing what appear to be relentless debt-collection efforts by tax-exempt hospitals, including UVA Health System,” Grassley wrote. “I am also concerned about how patients’ hospital bills get so high in the first place.”
Even though the letter questions only UVA Health System, whose practices were pegged in the investigation as particularly aggressive, it sends a signal that the Senate will be paying attention to an issue that affects all state-run and nonprofit health systems. Many medical providers pursue patients for unpaid bills, sometimes forcing them into bankruptcy. Several news stories have highlighted similar collections practices at other nonprofit hospitals.
Nonprofit hospitals get big tax breaks in exchange for providing “charity care and community benefit,” though there is no clear standard about what that should mean. Experts have questioned whether those breaks are deserved, given hospitals’ pricing, billing and collections practices.
In the seven-page letter, Grassley asks 19 detailed questions on various topics, including the system’s charity care (free or discounted care provided to low-income patients), debt collection policies, and its rationale for the litigation threshold of $1,000, enacted in 2017. Grassley asks specific questions about UVA’s list of standard prices for procedures and equipment, commonly known as the “chargemaster,” which is posted on its website.
The letter was addressed to CEO Pamela Sutton-Wallace, who will depart UVA Health System for NewYork-Presbyterian Hospital next month. UVA Health System has until Nov. 19 to respond.
“UVA is committed to assisting indigent and uninsured patients and making sure they receive all necessary care,” UVA Health System spokesman Eric Swensen said in an email to KHN. “We will review the letter, and look forward to working with Sen. Grassley to respond to his questions and share with him the policy changes we have announced and started implementing over the past month to better serve our patients.”
In response to KHN’s investigation, UVA Health System swiftly vowed to change its policies to increase financial assistance, give bigger discounts to the uninsured and reduce its use of the legal system. However, KHN reported that some critics do not think the new policies go far enough.
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